Forex Flash: Could be a very strong week for the USD again - BMO

FXstreet.com (Barcelona) - Stephen Gallo, ranked the most-accurate currency forecaster in a Bloomberg review from last June 2011, and now head of currency strategy at Bank of Montreal, notes "we look for US April retail sales data, initial jobless claims and April CPI to take the bulk of the FX market’s attention on the USD front this week."

Stephen adds: "On balance, we think upside surprises in the economic data coming out of the US will have the potential to make it a very strong week for the USD, depending of course on the size of those upside surprises. We tend to view the fluctuations in the USD, the US 10-year yield and the JPY this week as something of a “sea change” for market perceptions of a possible evolution of the Fed’s monetary policy stance, increasing relative growth divergence between the US and the rest of the world and the potential downside growth risks stemming from a sharp sell off in bond markets."